Bloomberg broke the news yesterday that Cisco Systems, Inc. (NASDAQ:CSCO) might be on its way to acquiring security-software company Imperva Inc (NYSE:IMPV). In reaction, RBC Capital analyst Mitch Steves reiterates an Outperform rating on CSCO with a price target of $35, which represents a nearly 11% increase from where the shares last closed.

On the assumption that Imperva is bought for $54 per share, Steves believes the firm could be acquired in the range of an enterprise value of $1.5 billion. Taking into account CSCO’s recent debt raise, the analyst anticipates a 2% interest loss on the cash.

Steves notes based on a “quick accretion dilution model” the analyst has drafted that an estimated $70 million in total OPEX and sales synergies would be necessary for the deal to translate as EPS positive by 2017. Consensus projects a $7 million loss for “Imperva Stand Alone” in 2017.

From the analyst’s assessment, “While an Imperva transaction could be EPS accretive, we note that it would not change the long-term thesis as the Company would be building out a larger security presence (in-line with the Company’s Strategy).”

However, “While an Imperva transaction would not move the Cisco model materially, we see potential for an additional penny in EPS,” Steves explains, between a 10% sales uplift juxtaposed against the Street and OPEX $40 million total reduction against current forecasts of $245 million for the current year.

Additionally, the analyst notes CSCO has total debt payments in the amount of $4.1 billion due by March of 2017. As such, the giant raised $6.25 billion to allow for greater cash flexibility, leaving around $2.1 billion following adjustment for the debt payment to be able to make acquisitions, buybacks, or dividends possible.

As Steves evaluates the situation, CSCO has indicated its next step would be a cloud applications-only kind of hybrid cloud set-up, finding a bid on Imperva a logical positive in the bigger picture.

“Imperva does fit this description given that the Company’s flagship product is the SecureSphere Data Security Suite, an integrated, modular suite that provides database, file, and web application security, and it can protect traditional on premise data as well as data in private, public, and hybrid cloud computing environments,” the analyst concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Mitch Steves is ranked #491 out of 4,189 analysts. Steves has an 88% success rate and yields15.2% in his yearly returns. When recommending CSCO, Steves gains 7.0% in average profits on the stock.

TipRanks analytics demonstrate CSCO as a Buy. Based on 25 analysts polled in the last 3 months, 16 rate a Buy on CSCO, 8 maintain a Hold, while 1 issues a Sell. The consensus price target stands at $33.45, marking a nearly 6% upside from where the stock is currently trading.